Nobody chooses to fall behind on their mortgage payments. The loss of a home to foreclosure is emotionally devastating. It’s typically the result of circumstances beyond your control such as loss of a job, loss of wages due to a serious injury or long-term illness, or another of life’s unwelcome misfortunes. Most of the time, a foreclosure is unavoidable, and leaves people worried about their future credit worthiness. One of the most common questions for people facing foreclosure is “How long will a foreclosure stay on my credit report”?
The answer is that a foreclosure stays on your credit report for 7 years. However, its effects lessen as the years pass, as you take steps to reestablish your credit.
How Will Your Post-Foreclosure Credit Report Affect You?
Unfortunately, most people don’t realize how much their credit score affects ordinary aspects of their daily lives. For example, your credit score is often used
- By potential employers, to weed out candidates with low scores
- By insurance companies, to set rates and even to deny people coverage
- By utility companies who tend to charge hefty security deposits if your score is low
- By landlords, to screen potential renters (Frequently, this is an unwelcome surprise for people who have lost their home due to foreclosure only find this out when they’re trying to find a new living arrangement.)
What Can You Do to Fight Back?
The first thing to do is to start immediately to begin the process of rebuilding your credit. You’d be surprised how many credit card providers will approve you for a high-interest card very soon after a foreclosure or even after bankruptcy proceedings. Use the card for small purchases, and pay the balance back each month in full to start reestablishing good credit.
Consult with a lawyer who specializes in foreclosures, bankruptcies and class action lawsuits. It’s not uncommon to have a foreclosure removed from your credit report if the bank makes an error, including “rubber stamping” foreclosure documents or not following proper procedure.
For these reasons, it makes sense to at least consult with a lawyer to see if there might be a remedy for your case.
If you’re a California homeowner or business owner who’s facing foreclosure, or who’s property has already been foreclosed, Call Preston Law at (415) 842-4666 for a free consultation or fill out our contact form.